25-6-9 - Good faith transfer.
25-6-9. Good faith transfer.
(1) A transfer or obligation is not voidable under Subsection 25-6-5(1)(a) against a personwho took in good faith and for a reasonably equivalent value or against any subsequent transfereeor obligee.
(2) Except as otherwise provided in this section, to the extent a transfer is voidable in anaction by a creditor under Subsection 25-6-8(1)(a), the creditor may recover judgment for thevalue of the asset transferred, as adjusted under Subsection (3), or the amount necessary to satisfythe creditor's claim, whichever is less. The judgment may be entered against:
(a) the first transferee of the asset or the person for whose benefit the transfer was made;or
(b) any subsequent transferee other than a good faith transferee who took for value orfrom any subsequent transferee.
(3) If the judgment under Subsection (2) is based upon the value of the asset transferred,the judgment must be for an amount equal to the value of the asset at the time of the transfer,subject to an adjustment as equities may require.
(4) Notwithstanding voidability of a transfer or an obligation under this chapter, agood-faith transferee or obligee is entitled, to the extent of the value given the debtor for thetransfer or obligation, to:
(a) a lien on or a right to retain any interest in the asset transferred;
(b) enforcement of any obligation incurred; or
(c) a reduction in the amount of the liability on the judgment.
(5) A transfer is not voidable under Subsection 25-6-5(1)(b) or Section 25-6-6 if thetransfer results from:
(a) termination of a lease upon default by the debtor when the termination is pursuant tothe lease and applicable law; or
(b) enforcement of a security interest in compliance with Title 70A, Chapter 9a, UniformCommercial Code -- Secured Transactions.
(6) A transfer is not voidable under Subsection 25-6-6(2):
(a) to the extent the insider gave new value to or for the benefit of the debtor after thetransfer was made unless the new value was secured by a valid lien;
(b) if made in the ordinary course of business or financial affairs of the debtor and theinsider; or
(c) if made pursuant to a good-faith effort to rehabilitate the debtor and the transfersecured present value given for that purpose as well as an antecedent debt of the debtor.
Amended by Chapter 252, 2000 General Session